profitability index

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September 5, 2018 at 7:03 am #471505
ayeshatabani
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Dear sir,
When calculating Profitability index both these ways are acceptable right?

1) NPV/ initial investment

2)(NPV-initial investment)/intial investment

Please do correct me if i’m wrong.
thankyou
September 5, 2018 at 2:19 pm #471586
John Moffat
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What you have written is correct except that you should have written PV and not NPV in both cases.

(PV – initial investment = NPV 🙂 )
September 5, 2018 at 4:24 pm #471621
ayeshatabani
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thankyou!
September 5, 2018 at 6:18 pm #471673
John Moffat
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You are welcome 🙂
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